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Canada Moves to Plug Oil Spill Gaps With Gateway Looming

May 29 (Bloomberg) -- An oil barge sailing into Chatham
Sound near the Canadian port of Prince Rupert, 30 miles south of
Alaska, runs aground and spills heavy oil into the Pacific
Ocean.

The tide begins to move a crude slick along a migration
route for killer whales. Canadian response teams struggle to
deploy enough resources to contain the spill of 18,325 barrels.
The U.S. Coast Guard is called in. After 16 hours, the oil has
spread north.

This incident hasn’t actually occurred -- it’s a scenario
presented in documents obtained by Bloomberg News from the
nation’s transport department under access-to-information law.
Shippers in Canada are legally required to be prepared for a
spill four times as large.

Yet it could take at least 72 hours to respond to a spill
that big in places such as Kitimat, British Columbia, end point
of Enbridge Inc.’s proposed Northern Gateway pipeline, according
to the documents.

Some of the equipment needed would be anchored more than
500 miles southeast, off the coast of Vancouver, adding to the
response time, according to the documents.

The details of the scenario highlight the challenges Canada
faces as it prepares for an increase of oil tankers off Canada’s
Pacific coast to ferry heavy crude to Asia. A panel of tanker-safety experts appointed by the government last year estimated
as many as 600 more tankers a year may ply the coastal region,
which includes ecosystems similar to Alaska’s Prince William
Sound, where the Exxon Valdez spilled 260,000 barrels of oil in
1989.

Safety Concerns

Prime Minister Stephen Harper’s government announced
changes earlier this month designed to address the kinds of
maritime safety concerns raised in the documents, which
described the existing system as incoherent. The government’s
first step calls for the development of a region-specific plan
for four areas including the southern coast of British Columbia.

The government said it’s acting on recommendations made by
the panel of tanker-safety experts who concluded the nation’s
spill-response regime, created about 20 years ago, hasn’t
adapted to the emergence of risk-based planning and alternative
cleanup tools.

The new measures, released about a month before the cabinet
is scheduled to decide on the C$6.5-billion ($6 billion)
Northern Gateway proposal, would also make it easier for
responders to use chemical dispersants, while making more money
available to spill victims from an industry-financed fund. The
changes, announced May 13, don’t explicitly require more on-the-water response resources.

The measures “are part of our government’s commitment to
achieve a world class tanker safety system,” said Maryse
Durette, a spokeswoman with Transport Canada, by e-mail.

Paper Capability

Gerald Graham, president of Worldocean Consulting Ltd., a
Victoria, British Columbia-based company specializing in marine
oil spill prevention, response and planning, said while new
federal measures represent an improvement, they don’t fully
address the risks.

“You can have all the capability on paper, but what does
it mean on the water?” said Graham, whose company is advising
an environmental group and First Nations on Northern Gateway,
according to its website.

Six Hours

The Northern Gateway project won approval from a regulatory
panel in December, subject to 209 conditions. One of those
requires Enbridge to establish a response organization that
could handle a spill more than three times the current legal
limit. The company, which has said it is working to satisfy the
conditions, would have to ensure recovery teams could be on the
scene in as little as six hours.

Enbridge will have spill response equipment along the
tanker route in the Douglas and Principe Channels, said Todd
Nogier, a spokesman for the company in a phone interview. In
addition, the company is having special tugboats built that will
be tethered and lead tankers in and out of the channels.

A “world leading” maritime safety system is one of five
demands British Columbia’s provincial government has put forward
to secure its support for Gateway. Kinder Morgan Energy Partners
LP has a separate proposal to expand the Trans Mountain pipeline
to transport Alberta oil through Vancouver’s port.

Provincial Report

British Columbia last year commissioned its own spill
response report, which highlighted a lack of response vessels
suitable for open water and a shortage of rescue tugs in the
north.

“It’s going to take a few years to get to a place where
we’ve filled in the gaps,” Mary Polak, British Columbia’s
environment minister, said in an interview. The federal
government’s moves “certainly shows that they’re interested in
achieving it. We are working with them to dive deeper into the
detail.”

Under Canadian law, shippers are responsible for cleaning
up offshore spills. The Canadian Coast Guard would oversee the
industry response, while Transport Canada is the lead regulator.

In the event a company can’t or won’t respond, the Coast
Guard would take over, using its resources and those of other
agencies. That also raises concerns from pipeline opponents
because Canada’s Auditor General said in a 2010 report the
organization’s emergency response plan that was out of date.

Industry Group

Western Canada Marine Response Corp., based in British
Columbia, is owned by Imperial Oil, the Canadian unit of Royal
Dutch Shell Plc, Chevron Corp., Suncor Energy Inc. and Kinder
Morgan’s Trans Mountain pipeline unit. It’s funded by over 2,000
members, including tanker companies, and is certified by the
government to support cleanup operations.

The agency’s head recommended the government at least
triple the industry’s capacity to respond to oil spills in
British Columbia, according to the documents.

“There currently isn’t a national plan that brings
everything together,” Kevin Gardner, president of the response
corporation, told the tanker safety review panel at a June, 2013
meeting in Vancouver.

‘Risk-based Model’

The response agency would like to see a “risk-based model
where the capacity is based on the risk for any given area,”
spokesman Michael Lowry said in an e-mail this week.
“Conversations are ongoing with government on how this new
model will unfold.”

No oil tankers currently call at Kitimat or Prince Rupert,
Lowry said. If Northern Gateway is approved, Kitimat would
probably be deemed a “designated port” by the government,
which would require quicker response times and more equipment
nearby, he said.

Lowry said the agency typically responds more quickly than
required by law. He declined to provide past response times for
Prince Rupert, the area identified in the scenario, saying it
hasn’t responded to many spills there.

Typically, even the best clean-up efforts result in between
10 percent and 15 percent recovery of spilled oil, according to
Worldocean’s Graham. Aboriginal communities along the coast,
which rely on the sea beds for food, “will continue to take any
actions that are necessary to stop oil tankers,” the Coastal
First Nations said in a May 13 statement.